Abstract:
This article seeks insights into how individuals, processes, and structures interact to create the micro-foundations of an operational capability related to production line innovation. Drawing on the literature on the micro-foundations of dynamic capabilities, we develop a model that explains how structures and processes encourage individuals to interact and how organizational routines and production line innovation capabilities emerge through these interactions. We based this study on a single case study design and used the Gioia methodology to analyze the data. The model was developed using 20 interviews with automotive industry suppliers, data collected from participant observations, and data from secondary sources. First, the findings at the individual level show that the mentality and experiences of managers affect macro-level capabilities. Second, social capital and networks, learning and integration capabilities, participatory decision-making and commu-nication, coordination capabilities, and human resources management capabilities influence the development of production line innovation capability by promoting interpersonal interaction. Finally, structural factors such as organizational barriers and processes improve production line innovation capability. This study contributes to the literature on the micro-foundations of dynamic capabilities.
